Burlington Northern Santa Fe Reports Fourth Quarter/Full Year 2008 Results

FORT WORTH, Texas — Burlington Northern Santa Fe Corp. reported quarterly earnings of $1.79 per diluted share, an increase of 23 percent compared with fourth-quarter 2007 earnings of $1.46 per share.

“During 2008, BNSF earned $6.08 per share, an increase of 19 percent compared with 2007, and had its best on-time performance in more than five years despite significant weather disruptions,” said Matthew K. Rose, BNSF Chairman, President and Chief Executive Officer. “The second half of the fourth quarter saw a significant downshift in economic activity related to the global recession. Given the current economic uncertainty, we are focused on effectively managing our resources and driving continued productivity throughout our organization,” Rose added.

Fourth-quarter 2008 freight revenues increased $124 million, or 3 percent, to $4.25 billion compared with $4.12 billion in the prior year. The 3-percent increase in revenue was primarily driven by improved yields and approximately $220 million from higher collection of fuel surcharges, which was significantly influenced by the two-month lag in fuel surcharge pricing affecting the majority of our business. The increase in revenue more than offset a 7-percent decline in unit volumes.

Coal revenues were up $173 million, or 19 percent, to $1.07 billion, due to improved yields, contractual economic escalators and increased unit volumes. Agricultural Products revenues rose $34 million, or 4 percent, to $838 million for the fourth quarter of 2008. This increase was primarily due to strong yields, offset by lower unit volumes principally resulting from lower export volumes. Industrial Products revenues of $919 million were $7 million, or about 1 percent lower than the fourth quarter of 2007. Improved yields in the Industrial Products business group were more than offset by lower unit volumes due to soft economic conditions and continued weakness in the housing market. Consumer Products revenues decreased $76 million, or 5 percent, to $1.42 billion, driven by a decline in unit volumes as a result of lower demand due to the weakness in the consumer economy. Increased fuel surcharges benefited each of the business units.

Operating expenses for the fourth quarter of 2008 were $3.26 billion, a 1-percent reduction compared with fourth-quarter 2007 operating expenses of $3.30 billion.

For the full year of 2008, BNSF achieved operating revenues of $18.0 billion, a 14-percent increase over 2007, which included revenue increases in each of the Company’s four business groups. Operating expenses were $14.1 billion, an increase of $1.8 billion over 2007. The $1.8 billion increase in operating expenses was primarily driven by a $1.3 billion increase in fuel expense due to higher fuel prices. BNSF achieved a 19-percent increase in earnings per diluted share in 2008.

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